By Deborah Goonan, Independent American Communities
I just viewed another TV report on “the trouble with HOAs” from KING 5 in Washington state. The headline is a grabber, but the content of the report is really all about promoting pending legislation (SB5263), sponsored by Sen. Jamie Pedersen, D-Seattle.
I’ve included a link below to the summary of the 134-page bill. Basically, it’s another regurgitation of the Uniform Common Interest Ownership Act, written by attorneys working for the HOA industry. While there are some good provisions included in SB5263 such as requirements for open board meetings and reserve studies, as well as improved pre-sale disclosures for home buyers, there is one fundamental omission: accountability.
Nothing in this bill – or any version of the Uniform Acts – provides practical legal remedies for consumers (homeowners and residents) to enforce their legal rights if – or when – HOA leaders violate the law or the provisions of the HOA’s governing documents. (Articles of Incorporation, ByLaws, and Covenants, Conditions & Restrictions (CC&Rs))
This is yet another version of Regulatory Window Dressing – an attempt by state Legislatures to appear as if they are doing “something” to help homeowners, when, in fact, the statute will likely be of little help at all.
Just look at any of the other states in the U.S. that have adopted portions of the Uniform Acts – Florida, California, Kansas, Virginia, etc. HOA problems persist despite the legal requirement for open meetings, homeowner access to financial records, and disclosure packets for home buyers.
Even if SB 5263 becomes law, in the event of a dispute or disagreement with one’s HOA, a Washington state homeowner will still be left with only three options:
- Accept the HOA’s actions and/or penalties
- Lawyer up and file a complaint in civil court, or
- Move out to escape further abuse and tyranny
That’s why homeowners interviewed by KING 5 express skepticism, and call for true oversight and regulation of HOAs. Take a look at the video for yourself:
Homeowners call HOA fines and penalties excessive (VIDEO link)
Danielle Leigh, KING
9 hours ago
Did you pick up on two crazy, outrageous statements?
AG’s excuse for not providing resolution services
First, there is the statement by the Attorney General that, although they can take complaints about homeowners, condominium, and cooperative associations, they can’t do anything to help resolve those problems, because an Association is a “private organization, not a business.”
Are you kidding me?
Community Associations Institute (CAI) – the main blockade to consumer protection legislation of HOAs – has compared “community associations” to businesses for many years, although we haven’t heard much of that rhetoric lately. Now that CAI wants FEMA funding and IRS tax deductions for HOA assessments, suddenly the organization admits that Association Governed Housing is supposed to serve a public interest.
It’s part of CAI’s political bipolar disorder.
At the same time, local government officials tend to think of HOAs as “mini-governments,” but CAI attorneys will tell you that HOAs are private corporations that are not bound by Constitutional constraints on civil liberties, and they should be run like a business.
In fact, a few states have regulatory agencies for Association Governed Housing. California and New York grant narrow, limited authority to their Attorneys General (AG), while states such as Colorado and Nevada have carved out small departments within their Business Regulatory agencies.
As you can see, national confusion about what HOAs are and how they should be governed has led to patchwork legislation across the U.S.
CAI admits that industry rights come first
The statement made by Washington CAI President Jeremy Stillwell says it all.
“Legislating on an individual person basis often can do harm to the industry as a whole.”
Translation: if individual rights and consumer protection become a priority – as they should be in a free, democratic republic such as the U.S. – it might cut into the profits of real estate industry special interests.
So what if the HOA industry is harmed? In a free country, that opens the door for competing industries to offer better products and services to housing consumers!
Homeowners do not benefit from bullying their neighbors with fines and HOA foreclosures over minor disputes and small assessment liens. But association management companies and attorney do.
The best part is that Stillwell goes on to tout that 65% of homeowners are satisfied with their HOA. KING 5 rightly points out, what about the other 35%?
What industry touts less than two-thirds approval rating as a resounding success and validation of their performance? I wouldn’t buy a car or stay in a hotel with a 65% positive rating!
And when you consider that CAI’s research foundation – funded by donations from CAI members – has bought and paid for the survey, of course they are going to attempt to present themselves in the best light possible, even if the facts don’t support their claims of hoards of happy HOA consumers.
For those interested in learning more about WA SB 5263, here’s the summary report. Stay tuned for updates as they become available.